Mixed bag in Autumn Budget won’t cure car buyers’ uncertainty and doubt

The Chancellor has presented a mixed bag of measures in her Autumn Budget that probably don’t amount to the kick in the family finances many motorists feared, but will still have far-reaching effects for the car industry and its customers.

Above all, the Budget piles on more of the uncertainty that has shaken consumer confidence and left car manufacturers chasing shadows over recent years. The collection of deferred tax rises and promised investment creates a complex picture that on balance seems more likely to deter new car purchases than encourage them. 

The pay-per-mile tax on EVs and plug-in hybrids due in 2028 definitely raises more questions than answers. How will such a scheme be implemented? Will drivers report their own mileage? Will their cars communicate it digitally? What are the privacy implications of any digital tracking system? Will we be charged for miles driven outside the UK? 

Details are predictably thin on the ground and even if they weren’t, a lot can change between now and 2028. What we do know is that negative headlines about the rising cost of EVs have already been written. 

The freeze on fuel duty and the retention of the 5p cut will be welcomed by drivers but it’s only a stay of execution. In September 2026 fuel prices will be on the rise again. Buyers may well be pushed towards more fuel-efficient cars by this and some of those taking the jump to EVs will be helped along the way by a boost in funding for the Electric Car Grant that should extend the scheme into 2030. 

By that stage, if the proposed ban on the sale of new petrol and diesel cars holds firm, EVs and some hybrids will be the only cars you’ll be able to buy in the UK. But we don’t yet know exactly which hybrids will be allowed or what the impact on buyer behavior will be as the ban draws ever closer. 

In the shorter term, raising the threshold for the Expensive Car Supplement on VED tax to £50,000 will make many ordinary EVs costing a little over £40,000 usefully more affordable to run. This should be a positive move for EV uptake and we’re told that the pay-per-mile tax on EVs will also generate more funds for the never-ending quest to rid our roads of potholes. Another mark in the ‘plus’ column’.

There’s extra support for the roll-out of electric car charging infrastructure but nothing was announced to address the bigger issue of charging costs. A VAT cut from the 20 per cent rate charged on public charging to equalise with the five per cent paid on domestic electricity would have made EVs more attractive for those who can’t charge at home. As it is, these drivers – who are often in towns and cities where EV air quality benefits would be felt most – will be stuck paying fuel prices that are scarcely any cheaper than what you’d pay to run a petrol car.

Just when car buyers could have used a positive and clear Government message to make the case for EVs, the chancellor has presented them with more sums to do, and doubts over the future to mull over. Such is life.

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